Optimization of the Internal Logistics Served by an AGV System A case study at Kinnarps Production AB

Abstract: Logistics plays a crucial role in companies’ ability to sustain competitive on the market. Time is regarded as one of the important metric in terms of logistics, since time influences the lead time of the products, which results in the vital advantage of speed. The recent business environment forces Kinnarps Production AB, a manufacturer of furniture, to optimize their inventory material flow in a way of increasing their capability and capacity to load more distribution containers with goods daily. The present circumstances of the material flow are associated with number of negative factors. An automated guided vehicle (AGV) system is operating and handling the distribution of goods. Wrong sequence of activities, long transportations, high transportation delays, waiting time, varying numbers of AGVs, wastes, bottlenecks are among the important issues to be considered. The purpose of this thesis is to analyze the material flow in Kinnarps Production AB’s inventory seven and to improve the AGV system activities within. Concepts associated with identifying waste were used by separating value-adding activities from the non-value added ones. The usage of ideal reference systems techniques were the base for identifying problems. Concrete literature regarding AGV’s design system was applied in establishing different statements about the material flow and identification of problems. Different methods and techniques were used in approaching the research, but most above others is the case study approach. Numerous amounts of secondary data have been employed in verifying the collection of other data carried out by primary data collection as well as verifying the qualitative and quantitative analysis. A mapping of the current system was established with respect to orders, times and distances. Numbers of congestion points were identified, non-value adding activities were eliminated or decreased, rearrangement of sequencing of different activities was considered and different pallets arrangement system was established. A stochastic model was used in identifying the AGV’s time variables in the system and estimating appropriate amount of AGVs within the inventory. All the findings from different calculations and estimations were associated with Kinnarps Production’s future increased demand. Different issues and considerations were analyzed and appropriate suggestions were given for elimination of the negative factors in the inventory or their decrease. Among the most influencing results was the proper amount of AGVs in the inventory area, pallets rearrangement, different stocking policy, rearrangement in the sequence of activities, increase of the buffer for pallets used for loading containers, new conveyor system for the incoming goods in the inventory, transportation layout changes resulting in blocking free routines, separate control system, decrease of the effect of stoppages. All these findings are considered to optimize the material flow and increase the system capacity contributing to an increase of the daily containers outgoing from Kinnarps Production AB.